Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The 99 percent

economist.com

Post reply on HN
Print view View original

41–50 of 162 posts

Re: The 99 percent

#41

Post by noahc »

bravura wrote: post #36
noahc wrote: post #9

Earlier quoted context omitted.

Can anyone with more experience and knowledge explain the effects of #3. I've read that HFT is actually a good thing because it basically acts as a market maker. This is just a back of the napkin opinion, but it seems that #3 would reduce liquidity in the markets. We know that markets aren't perfect or else Buffet and other value investors couldn't survive. Does HFT make markets more or less perfect at pricing? Does…

Why does a market need millisecond-resolution liquidity?

I'm not sure it does need that much liquidity. But, at what point are we not liquid enough? Is hourly liquidity enough? It's a good question, but I'm not sure how you measure what 'enough' is.

Re: The 99 percent

#42

Post by Toddward »

harryh wrote: post #19
Toddward wrote: post #7

Earlier quoted context omitted.

#2 is crucial - Glass-Steagall should never have been repealed.

Why? Do you even know why Glass-Steagall did? The strictly investment banks (as opposed to the consolidated ones) were the ones that had the most trouble / caused the most problems in the recent recession.

This will be a response to this parent and the one that posed essentially the same point.

I don't believe I referred to anything regarding the recent recession or who was to blame. My problem with the repeal of Glass-Steagall has more to do with the overwhelming conflict of interest it could create within these institutions (i.e., using deposits to grant credit to the investment arms for making risky bets). On the flip side, you could argue that proper regulation could stymie that risk, but I'd rather just not leave it up to chance (read: politicians). That's my opinion - you may feel differently.

Re: The 99 percent

#43

Post by argv_empty »

noahc wrote: post #41
bravura wrote: post #36

Earlier quoted context omitted.

Why does a market need millisecond-resolution liquidity?

I'm not sure it does need that much liquidity. But, at what point are we not liquid enough? Is hourly liquidity enough? It's a good question, but I'm not sure how you measure what 'enough' is.

At some point you'll have to decide: "enough" for whom? For someone just trying to accumulate some money for retirement, even hour-level liquidity probably looks like more than is useful (and will his broker even act on a request he makes in less than an hour? maybe someone else can answer that one).

Re: The 99 percent

#44

Post by hugh3 »

cperciva wrote: post #30
mynameishere wrote: post #15

Earlier quoted context omitted.

end loopholes that allow companies like exxon to pay no federal taxes Corporate taxes are idiotic. They should tax them at zero and replace the lost revenue with a new upper-margin tax. Reasons: 1. Corporate taxes are effectively a sales tax. 2. Corporations, unlike individuals, can hire armies of lawyers, accountants, and lobbyists to get around the taxes. 3. Those same professionals are more often deployed by large…

Eliminating corporate taxes isn't exactly what you want: It would turn corporations into tax shelters, allowing investments to compound at a faster rate. (You'd be effectively giving everybody an unlimited Roth IRA.) What you really want is an integrated tax system like Canada and many other countries have: Corporations pay income taxes, but when they pay out their profits as dividends, the individuals receiving thos…

It would turn corporations into tax shelters, allowing investments to compound at a faster rate

Is that so bad? Is it bad if we encourage people to invest in businesses rather than term deposits (or CDs as I think they're called in the US)?

Re: The 99 percent

#45

Post by cperciva »

hugh3 wrote: post #44
cperciva wrote: post #30

Earlier quoted context omitted.

Eliminating corporate taxes isn't exactly what you want: It would turn corporations into tax shelters, allowing investments to compound at a faster rate. (You'd be effectively giving everybody an unlimited Roth IRA.) What you really want is an integrated tax system like Canada and many other countries have: Corporations pay income taxes, but when they pay out their profits as dividends, the individuals receiving thos…

It would turn corporations into tax shelters, allowing investments to compound at a faster rate Is that so bad? Is it bad if we encourage people to invest in businesses rather than term deposits (or CDs as I think they're called in the US)?

That depends on what the businesses are doing. If people set up corporations which do nothing other than hold term deposits, I don't see how that's any better than people directly holding term deposits.

Re: The 99 percent

#46

Post by veyron »

guimarin wrote: post #18
noahc wrote: post #9

Earlier quoted context omitted.

Can anyone with more experience and knowledge explain the effects of #3. I've read that HFT is actually a good thing because it basically acts as a market maker. This is just a back of the napkin opinion, but it seems that #3 would reduce liquidity in the markets. We know that markets aren't perfect or else Buffet and other value investors couldn't survive. Does HFT make markets more or less perfect at pricing? Does…

Instituting #3 will lower liquidity. I think the trade-off is worth it. This is a topic where the critics, who argue in favor of the status quo are at an advantage, because the realities of HFT are not easily discernable to the layman, and require a much deeper understanding of the entire modern financial ecosystem. Suffice to say, there were/are pros and cons to having a specialist.

"Suffice to say, there were/are pros and cons to having a specialist."

Let's not go there. Specialists were accused of favoritism: filling orders that certain traders submitted and ignoring requests from other traders.

More generally, the advancements, both in technology and in pricing, actually helped everyone. SOES (small order entry system) helped smaller traders to quickly trade. Decimalization really helped reduce transactions costs (spread between bid and offer is a sort of transaction cost, when we were dealing with 1/16th quoting, the spread cost was over 6 cents)

On another front, brokers used to screw people over by telling people they bought at one price while actually buying at a lower price. This is why Regulation NMS came about. And HFTs nowadays help keep all of the exchange prices in line, minimizing the potential damage of shady broker behavior.

Re: The 99 percent

#47

Post by majika »

njharman wrote: post #39
majika wrote: post #26

Earlier quoted context omitted.

You make a good case. However, I think it's important to acknowledge that corporate taxes are useful for providing an incentive for corporations to do something a certain way. That is, they can avoid the tax if they change their behaviour. (see: equal-opportunities employment, regional commercialisation incentives, emissions control, recycling, etc)

Greed is the most powerful force in the world. If you tie regulation to money, it will be exploited and corrupted. It also shifts accountability from the individual violators to "the corporation". Instead enforce criminal laws against people. Doing the "right thing" doesn't deserve reward. Doing the "wrong thing" does deserve punishment.

You want to criminalise failure to recycle, or failure to provide a work environment that's unreceptive to disabled persons? How's that going to work?

At what point does pollution or energy usage become criminal?

Re: The 99 percent

#48

Post by prostoalex »

noahc wrote: post #9
guimarin wrote: post #2

Five points for the OWS guys. 1. Transparency. We need to see where every dollar of the US federal gov't is spent. It needs to be on the internet, and it needs to be easily accessable. An exception can be made for classified spending in specific, but not so categorically (IE we spend X on classified stuff). Additionally, just like there is a Surgeon's General Warning on cigarette packages, there needs to be a link on…

Can anyone with more experience and knowledge explain the effects of #3. I've read that HFT is actually a good thing because it basically acts as a market maker. This is just a back of the napkin opinion, but it seems that #3 would reduce liquidity in the markets. We know that markets aren't perfect or else Buffet and other value investors couldn't survive. Does HFT make markets more or less perfect at pricing? Does…

People usually put an equality sign between high-frequency trading and algorithmic trading. One is a subset of another.

There's also a subset of algorithmic trading that inserts large stop-loss orders (not much of an algorithm there, it's just done by computer program instead of an individual), which have been known to cause flash crashes.

Hence the confusion and belief that by eliminating HFT we'll eliminate automatic stop-loss orders.

Re: The 99 percent

#49

Post by 3pt14159 »

cperciva wrote: post #30
mynameishere wrote: post #15

Earlier quoted context omitted.

end loopholes that allow companies like exxon to pay no federal taxes Corporate taxes are idiotic. They should tax them at zero and replace the lost revenue with a new upper-margin tax. Reasons: 1. Corporate taxes are effectively a sales tax. 2. Corporations, unlike individuals, can hire armies of lawyers, accountants, and lobbyists to get around the taxes. 3. Those same professionals are more often deployed by large…

Eliminating corporate taxes isn't exactly what you want: It would turn corporations into tax shelters, allowing investments to compound at a faster rate. (You'd be effectively giving everybody an unlimited Roth IRA.) What you really want is an integrated tax system like Canada and many other countries have: Corporations pay income taxes, but when they pay out their profits as dividends, the individuals receiving thos…

It is better in Canada, but we have loop holes like the rest of them. Certain countries have tax treaties with Canada that effectively allow a massive decrease in dividend taxes provided that you have "management fees" in those countries. Although you wouldn't qualify for other benefits of being a Canadian company, such as the one time 750k tax free capital gains allowance, or SR&ED or research grants.

Re: The 99 percent

#50

Post by cperciva »

3pt14159 wrote: post #49
cperciva wrote: post #30

Earlier quoted context omitted.

Eliminating corporate taxes isn't exactly what you want: It would turn corporations into tax shelters, allowing investments to compound at a faster rate. (You'd be effectively giving everybody an unlimited Roth IRA.) What you really want is an integrated tax system like Canada and many other countries have: Corporations pay income taxes, but when they pay out their profits as dividends, the individuals receiving thos…

It is better in Canada, but we have loop holes like the rest of them. Certain countries have tax treaties with Canada that effectively allow a massive decrease in dividend taxes provided that you have "management fees" in those countries. Although you wouldn't qualify for other benefits of being a Canadian company, such as the one time 750k tax free capital gains allowance, or SR&ED or research grants.

Oh, I'm not saying that the Canadian tax system is perfect. Far from it. Just that this specific property -- integration of corporate and personal income taxes -- is a very good thing.
Post reply on HN